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Home for the Holidays: Discussing Financial Matters with Parents

For many families, the holidays are one of the few times a year to get together and catch up on work, life, family, and personal matters. This also makes the holiday season one of the best times to bring up topics that are often more easily addressed in person, such as discussing financial matters with aging parents.

Finance in general can be a delicate subject to discuss, no matter who is taking part in the conversation. Yet avoiding the topic altogether comes with significant risks, including being unprepared to make important financial decisions should an unexpected illness or loss of life occur. Moreover, with people living longer lives (more than one in three of today’s 65-year-olds will live to age 90), the likelihood of requiring long-term health care services at some point also increases.1

According to a 2016 study, an American turning 65 today will incur about $138,000 in future long-term services and supports, with the family of the individual covering about half of these costs out of pocket.2 If the time does come for your parent or parents to require some sort of long-term care service, the last thing you’ll want to be worrying about is how to cover the costs associated with it. Preparing for this possibility ahead of time can help to relieve an enormous amount of physical, emotional, and financial stress during difficult times.

Having this conversation is clearly important—but how do you approach such a sensitive subject? Here are a few tips to help get you started:

Pick a time to bring up the subject. Try to avoid either waiting for something to prompt the conversation or bringing it up on a whim. Rather, prepare yourself, potentially your parents, and any other family members who should be involved by picking a time and place to start the conversation. If you will all be together over the holidays, pick a quiet time where you can have the conversation in private and avoid catching your parents by total surprise.

If possible, have the conversation in person. While this may be difficult for those who don’t live in the same city or state as their parents, having such a sensitive conversation face-to-face can lead to better understanding all around. If this isn’t an option, consider video chatting versus talking over the phone.

Acknowledge the sensitivity of the topic. Many parents may associate a certain level of pride with their finances and would prefer to maintain their privacy. It may also be difficult for them to acknowledge that at some point, they may not be able to manage their finances on their own. Set the tone for the conversation by asserting that you are looking out for their best interests by discussing this now instead of as a reaction to something.

Once you determine the time, place and overall tone of the conversation, another key element to consider ahead of time is the content of what you would like to discuss. Financial matters are far ranging and there are many dimensions to consider. If you’re unsure of what exactly to talk about in your conversation, a good resource may be your financial advisor. For now, here are some suggested topics:

Estate Planning

Do your parents have an estate plan in place? Are their plans current and reflect their most up-to-date wishes? Even if you have discussed this previously with them, confirm what actions they have taken and which legal documents they have created (and where they are located), such as a will, trust, power of attorney, etc.

Medical and Insurance

What kind of health insurance coverage, including Medicare or other applicable policies, do your parents have? What other kinds of insurance, such as life, disability, long-term care, homeowners, auto, etc., do your parents have? Determine what forms of insurance they currently own, where the policies are stored, and ask for contact information for professionals they may have worked with to get the policies in place, should you need it.

Personal Finance

Ask if your parents will share a list of all their financial accounts and where they are housed, as well as where their tax records are stored, how they currently manage their debts and expenses, and if you can have a copy of their usernames and passwords for any applicable accounts. Talk to them about any preparations they may have taken regarding the possibility of needing long-term health care. Lastly, ask for the contact information of their financial advisor(s) or other financial professionals they may have worked with in the past. To really get a handle on your parents’ finances, ask if it would be okay for you to attend a meeting between them and their financial advisor.

Depending on a range of factors, you may have more or less to discuss with your parents. While these types of conversations are never easy, they are crucial in order for everyone to be as prepared as possible when the time comes. The holiday season may just provide the perfect opportunity for you to initiate the conversation.

Interested in discussing this topic further with a financial advisor? With offices in 23 states, there is likely a North Star financial advisor near you. Contact an advisor here.

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